· US Group II light-grade prices remain competitive vs Europe – facilitating arbitrage, and versus Asia – curbing arbitrage supplies from that region.· US Group II heavy-grade prices remain firm vs Europe and Asia prices, limiting arb shipments from US and attracting supplies from Asia.· Open arbitrage from Asia to US for sustained period suggests Asia producers continue to have surplus heavy-grade supplies, even with improvement in regional demand.· Europe Group I prices hold firm/strengthen vs Asia prices – complicating Europe arbitrage flows to markets like Mideast Gulf/India.· Less competitive prices suggest Europe producers face less urgency to clear surplus supplies.· Asia Group I bright stock discount to domestic Chinese prices widens, reflecting unworkable arbitrage at current price levels.· Discount stays too narrow – Asia bright stock prices need to fall further or Chinese prices need to rise to make arbitrage work.· Asia bright stock prices can avoid price-cut if arbitrage works to other outlets at current price levels; pressure to cut prices rises if other outlets’ requirements are covered.· Asia Group II light-grade discount to domestic Chinese prices widens slightly but stays in narrow range for last three months.· Discount keeps arbitrage marginal.· Marginal arbitrage to China suggests supply remains sufficient to meet any improvement in its demand.· Marginal arbitrage to China complicates Asia refiners’ leverage to raise outright prices..Global base oils – week of April 10: Price outlook - margins
· US Group II light-grade prices remain competitive vs Europe – facilitating arbitrage, and versus Asia – curbing arbitrage supplies from that region.· US Group II heavy-grade prices remain firm vs Europe and Asia prices, limiting arb shipments from US and attracting supplies from Asia.· Open arbitrage from Asia to US for sustained period suggests Asia producers continue to have surplus heavy-grade supplies, even with improvement in regional demand.· Europe Group I prices hold firm/strengthen vs Asia prices – complicating Europe arbitrage flows to markets like Mideast Gulf/India.· Less competitive prices suggest Europe producers face less urgency to clear surplus supplies.· Asia Group I bright stock discount to domestic Chinese prices widens, reflecting unworkable arbitrage at current price levels.· Discount stays too narrow – Asia bright stock prices need to fall further or Chinese prices need to rise to make arbitrage work.· Asia bright stock prices can avoid price-cut if arbitrage works to other outlets at current price levels; pressure to cut prices rises if other outlets’ requirements are covered.· Asia Group II light-grade discount to domestic Chinese prices widens slightly but stays in narrow range for last three months.· Discount keeps arbitrage marginal.· Marginal arbitrage to China suggests supply remains sufficient to meet any improvement in its demand.· Marginal arbitrage to China complicates Asia refiners’ leverage to raise outright prices..Global base oils – week of April 10: Price outlook - margins